Many friends in the cryptocurrency circle should have played futures and have probably heard of going from 100,000 to 16 billion! The futures fortune history of 'Eastern Evil' Ge Weidong!
Ge Weidong once recommended this article on Weibo and said: 'This article is written very well, and every word is worth a fortune. I realized these principles ten years ago and have repeatedly preached them! However, I haven't written such a good article!'
The way of trading
The way of trading, the rigid are easy to break. Only the utmost softness can navigate the world. The soft and weak in the world are like water, yet the highest virtue is like water.
Success equals small losses plus profits of all sizes, accumulated multiple times.
It is very simple to avoid large losses; prioritize survival as the first principle. When there is danger that hinders this principle, abandon all other principles. Because no matter how many 100% excellent performances you had in the past, if you now lose 100%, you will have nothing.
The way of trading is to guard the unbeaten ground and attack the win-able enemy.
A loss of 50% on 1 million becomes 500,000, but to grow 500,000 to 1 million, you need to profit by 100%. Each success only allows you to take a small step forward. However, each failure will set you back a big step. Walking from the first floor of the Empire State Building to the top takes an hour. But jumping off the roof can take only 30 seconds to return to the ground. In trading, there are always unexpected events that can lead to losses. The simplest way to decide whether to stop-loss is to ask yourself one question: If you hadn't established a position now, would you still be willing to buy at this price? If the answer is no, immediately sell without hesitation.
Going against the trend is the beginning of failure. You should not fight against the market or try to defeat it.
There is no need to be smarter than the market. When a trend comes, respond and follow it. When there is no trend, observe and remain still. It is not too late to take action once the trend becomes clear. This may result in losing a small amount of opportunity, but it wins the safety of capital. Your goals must align with the market and follow its trends.
If you align with the market, profits will naturally flow in.
If you misread the trend, you need to use the old and reliable umbrella—stop-loss orders. This is the relationship between trend and profit. The two most basic rules for successful trading are: stop-loss and holding long. On one hand, cut losses and control passivity. On the other hand, if the profit trend is not finished, do not exit easily; let profits grow fully. In a bull market, most stocks can afford to be temporarily trapped. Because the next wave of rise will quickly free people from being trapped and even make a profit. At this time, if you buy right, you also need to understand how to sit still, regardless of the wind and waves, it's better than strolling in a quiet courtyard.
The key to the way of trading is to continuously grasp the advantage.
Quickly recognizing losses is an important principle in a bear market. When a position incurs a loss, do not increase your position to fight again. In a bear market, not losing or even losing less is winning. The more you do, the more mistakes you make; the less you do, the fewer mistakes you make; doing nothing means no mistakes. In a clearly bearish market, if you refuse to exit because you are afraid of small losses, you will eventually suffer large losses. Selling a stock struggling in a medium to long-term downward trend at any time is the right decision, even if it means selling at the lowest price. Holding passively and waiting for its bottom is a dangerous view, as it may never hit the bottom. Learn to let capital enter the market in batches. Once the initial position incurs a loss, the first principle is not to increase the position. The initial loss is often the smallest loss, and the correct approach is to exit directly. If the market continues to be unfavorable for the first entry position, it is a poor trade, regardless of how high the cost is, exit immediately and recognize the loss. Those who hope to resolve everything at the bottom or the top will always end up with a hot potato. In a bear market decline, having more money does not guarantee winning. Institutions often die harder than retail investors. Small funds do not need to strategically build positions and do not need to prepare in advance for unknown future trends. There is no need to suffer with the main force to the end. In a clearly downward trend, a small rebound of 20-30 points is not worth being excited about or participating in. Sometimes doing less can lead to more.
Acting more does not necessarily yield better results. Sometimes doing nothing is the best choice.
Don't worry about missing opportunities; a good hunter must be good at waiting. When there are no big opportunities, be as quiet as a stone. The way of trading is to patiently wait for opportunities, patiently wait for the most favorable risk/reward ratio, and patiently seize opportunities. In a bear market, there are always some institutions holding others' money, struggling desperately for a chance even with the slightest hope, seeking to break free from difficulties. We are holding our own money and should cherish it more. Do not blindly try to catch the bottom, nor blindly trade near the bottom. Remember, both the bottom and the top are the most dangerous areas for losing big money.
When you feel confused, do not make any trading decisions. There is no need to force a trade if there is no proper market condition. If there are no high-probability opportunities, do not force yourself to enter the market.
The stock market is like a battlefield, and capital is your soldier. Only when the overall direction is correct can you confidently engage in battle. You must win before seeking battle; you can't seek victory before engaging in battle.
The core of speculation is to avoid uncertain trends as much as possible and only bet in obvious upward trends. Moreover, before taking action with considerable confidence, buy yourself a piece of insurance (set stop-loss points for exiting) to protect against subjective errors.
To trade, one must have the ability to start over, including in terms of capital, confidence, and opportunities. You can be defeated by the market, but you must never be eliminated by it. We come to this market to make money, but this market is not an automatic ATM.
Entering the stock market is to rob those who are always ready to rob you. Stock speculation emphasizes timing and skill; opportunities are not available every day, and even when they are, not everyone can seize them. Learn to analyze the opportunities you are good at grasping, leveraging your strengths to attack others' weaknesses. If there is an opportunity, take it; if not, observe and leave. If you don't even know what you are good at, don't act rashly. Swimming with crocodiles is risky; be cautious when entering the market to make money.
In trading, it is most taboo to use pressured funds. Once funds are under pressure, the mindset will distort. You will panic and exit due to normal market fluctuations, only to realize later that you were in a very advantageous position. You may also be constrained by the time of fund usage, risking everything without opportunity, ultimately leading to total loss. Many people are diligent and eager to learn; they talk about Gann and Elliott, and when they are right, they boast everywhere, but when they lose big, they think they lack skill and double down on their research.
The time window keeps opening wider, while the wave theory makes money seem less and less, leaving you confused and unable to wake up from it.
You should know that all theories and techniques can only be effectively applied under the premise of respecting market trends. If you are always trapped for a long time, it only shows that you can't even distinguish the most basic bull and bear trends in the stock market. No matter how precise you look at the market, and how magically the numbers appear, it cannot change your fate of failure. Even if another bull and bear cycle occurs, it will still be you who is trapped. Stop talking about Soros and Buffett; it's just nonsense!
Capital management is strategic, buying and selling stocks is tactical, and specific price levels are combat. In ten trades, even if you fail in six of them, as long as you control the losses from these six trades to within 20% of your total trading capital, the remaining four successful trades, even if three are small profits to cover the overall 20% loss, and one is a big profit, will still yield good returns.
You cannot control the direction of the market, so there is no need to waste energy and emotions in situations you cannot control. Don't worry about how the market will change; worry about what strategies you will take to respond to market changes. It's not important to judge right or wrong; what matters is how much profit you make when you're right and how much loss you can bear when you're wrong.
Before entering the market, calm down and think about how many professional skills you have to support you in battling in the market; consider whether your mindset can withstand the ups and downs of the waves; think about whether your limited capital can handle unlimited opportunities and losses.
Trading stocks is like going to sea; risk avoidance is safety. There are many navigation maps of sunken ships at the bottom of the sea.
The most important factor for trading success does not lie in which set of rules you use, but in your self-discipline.
Time determines everything. The different stories of the chief designer and Vice Chairman Lin tell us that life is not just a contest of strategies; to some extent, it is also a competition of time and life.
If Buffett lived 10 more years, even a continuous profit of only 5% each year would be enough for his wealth to grow immensely.
I am the senior brother, sharing valuable content for retail investors in the cryptocurrency circle every day! There is a way to the soul, and there is a skill in handling coins. It seems simple, but achieving unity of knowledge and action is not easy. I hope to help many cryptocurrency friends avoid detours! Let's get rich together! Follow me@加密大师兄888 Bulls and bears together, let's get rich!
